Elkedra Pastoral Company Pty Ltd
[2010] FWA 2087
•12 MARCH 2010
[2010] FWA 2087 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
(AG2009/20790)
COMMISSIONER LARKIN | SYDNEY, 12 MARCH 2010 |
Application for approval of the Elkedra Pastoral Company Pty Ltd Enterprise Agreement 2009 – no disadvantage test – daily rates of pay – hours of work – public holiday provision – application refused.
[1] An application has been made for approval of an enterprise agreement known as the Elkedra Pastoral Company Pty Ltd Enterprise Agreement 2009 (the agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by First IR Consultancy Pty Ltd (employer bargaining representative). The employer is Elkedra Pastoral Company Pty Ltd. The agreement is a single-enterprise agreement.
[2] The agreement was made during the bridging period 1 as defined in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act), accordingly, when considering whether to approve the agreement I have taken into account the provisions of Part 2–4 of Chapter 2 of the Act as modified by Schedule 7 of the Transitional Act.
[3] The agreement is to operate in the Northern Territory and applies to work performed on a cattle station approximately 120 kilometres outside Alice Springs. 2 The agreement is to operate for a period of four years to the exclusion of “all awards, industrial agreements or orders applying to the company or its employees”.3 The agreement provides for a 3% increase per year over the life of the agreement. There are four employees covered by the agreement. Those employees voted and approved the agreement. The reference instrument for the purpose of the no disadvantage test is the Northern Territory Cattle Industry Award 2001 (AP808598CRN) (the award).
[4] The application was heard on 3 February 2010. Mr Houlihan, with Ms Sprague, First IR Consultancy Pty Ltd appeared on behalf of the employer. There were no appearances on behalf of the employees to be covered by the agreement.
[5] During proceedings a number of issues were raised with Mr Houlihan. Those issues concerned the date requirements of s.181 of the Act, the terms of the dispute settling provisions of the agreement and issues associated with the no disadvantage test. Mr Houlihan was invited to put submissions in relation to the application and the agreement. At the conclusion of the hearing Mr Houlihan was provided with an opportunity to file written submissions and other material in support of the application for approval. That material was filed 2 March 2010.
[6] In relation to the requirements of s.181, I accept Mr Houlihan’s submission during proceedings on 3 February 2010 that Form F17, in relation to question 2.6, was an error and the correct date was 28 December 2009. I would also accept the employer’s undertaking in relation to the requirements of ss.186 (6) of the Act as filed with submissions on 2 March 2010. The next issue to be addressed in this decision concerns whether or not the agreement passes the no disadvantage test as required by paragraph (d) of ss.186 (2) of the Act.
[7] The agreement’s pay rates are found at subclause 6.1 as follows:
6.1 Minimum Daily Pay Rates and Level Structure:
(a) The minimum daily pay rates are the same for Periodic and Permanent employees and when combined with other benefits elsewhere in this Agreement incorporate all overtime payment for Saturday work, and other overtime (except as provided in clause 8.3), as well as compensation for award district allowances and all other award based allowances, loadings and disabilities other than those set out elsewhere in this Agreement.
The following minimum daily pay rates and levels replace all award based minimum pay rates and levels including the replacement of junior pay rates and levels.
Competency Levels | Minimum Daily Pay Rate from date of operation |
Junior/Under 19 years Level 1 | $140.00 |
Level 2 | $145.00 |
Level 3 | $155.00 |
Level 4 | $170.00 |
[8] Subclause 8.3, referred to above, concerns Saturday and Sunday work and provides that work performed on a Saturday shall be paid at the daily pay rate. For work performed on a Sunday, payment shall be at the rate of 1.5 times the employee’s daily rate or an employee shall accrue 1.5 days time off in lieu, as nominated by the Manager. The same conditions would apply to a tradespersons, except the entitlement would be twice the employee’s daily rate. Under the award, Sunday work is paid at the rate of time and a half or double time (depending upon the classification and work performed) with the exception of cooks and cook’s offsiders.
[9] The rate of pay under the agreement is an all up rate for all work performed, with the exception of Sunday work. The rates are based on a daily rate as opposed to an hourly rate of pay.
[10] The agreement does not restrict the number of hours to be worked for the daily rate provided at subclause 6.1 above. Mr Houlihan submitted that the Tribunal could accept/assume that the average hours of work would be 9 hours per day and: “[t]his can be deduced from the fact that the employees can only perform their core duties during daylight hours. Daylight in this region is limited to 0600 – 1800. The award at clause 23.1 requires that unpaid meal breaks be a minimum of 30 minutes in duration and occur at least every 5 hours. The 12 hours of available working time must have a minimum of 1 hour of unpaid break. The reality is that lunch breaks are a minimum of an hour and additional meal breaks are a minimum of thirty minutes. This means that the maximum available time for working is 10 hours”. 4
[11] On Mr Houlihan’s assumption of what hours are or may or could be worked in a day, the following table reflects an approximate rate that an employee would be paid, as an all up rate, for different daily hours worked.
Daily Rate shown as an hourly rate for hours worked under the agreement
Level | 9 Hrs | 10 Hrs | 11 Hrs | 12 Hrs |
1 | $15.5555 | $14.00 | $12.7272 | $11.6666 |
2 | $16.1111 | $14.50 | $13.1818 | $12.0833 |
3 | $17.2222 | $15.50 | $14.0909 | $12.9166 |
4 | $18.8888 | $17.00 | $15.4545 | $14.1666 |
[12] The approximate rates of pay under the award, converted to reflect an hourly rate of pay based on 40 hours per week, are as follows:
- Level 1 $13.60 ($14.31 as per the minimum wage)
- Level 2 $14.20 ($14.31 as per the minimum wage)
- Level 3 $14.80
- Level 4 $16.00
[13] If an employee worked 10 hours then his/her rate of pay would be marginally higher than under the award for levels 2 to 4. However, as already stated, the agreement daily rate is an all up rate, with the exception of work performed on Sunday.
[14] Under clause 7, Work Periods, employees may be required to work up to 7 days per week, subject to continuous work periods not exceeding 13 days. However, the continuous work period may be up to a maximum of 20 days due to work cycle demands. The provision provides that there must be a one full day break between work periods and a half day paid hygiene break within each continuous 13 day working period. Provisions for breaks during the working day are provided for at subclause 8.2 of the agreement.
[15] Subclause 7.5 provides that employees may be required to perform other tasks of minimal duration outside their working hours without additional remuneration irrespective of whether or not they otherwise worked that day. I am at a loss to understand what “outside their working hours”actually means as the agreement does not state what the working hours of employees actually are. Clause 8, Working Hours and Breaks, provide that “[a]n employee shall be paid according to the number of days that they are required to, and actually do work, and not in accordance with the hours, notional or real that may have been worked”.Employees, in an emergency situation, may be required to work more than 12 hours. If that is the case the provision provides that at the manager’s discretion extra time in lieu may be awarded to an employee as compensation.
[16] The award, at clause 22, Hours of Work, provides the following entitlements.
“22.1 Tradespersons
The ordinary working hours for tradespersons must not exceed 40 per week. These hours are to be worked in not more than eight hours per day from Monday to Friday inclusive.
22.2 Cooks and cooks’ offsiders
There is no limitation of hours for cooks and cooks’ offsiders. However these employees must receive two days off each week.
22.3 Other employees
22.3.1 The ordinary working hours of all other employees must not exceed 160 hours in any consecutive period of four weeks. These hours are to be worked either:
22.3.1(a) over five days in the week, Monday to Friday; or
22.3.1(b) over five and a half days in the week, Monday to Saturday, where work is essential on Saturday morning for good husbandry or working with stock.”
[17] Overtime provisions in the award are found at clause 25.
[18] I acknowledge that the employer’s operations require flexibility in relation to working hours and breaks. That flexibility could be obtained by a flexibility term, which is a mandatory requirement of the legislation for enterprise agreements (s.202). The agreement, by its terms, attempts to obtain flexibility without the checks and balances outlined in the legislation.
[19] I am not persuaded that the daily rates of pay are such that an employee would not be disadvantaged under the terms of this agreement when compared to the entitlements provided by the award.
[20] The award at clause 29 provides an entitlement to 10 days without deduction of pay for the public holidays set out in the clause. The provision also provides an entitlement to payment for all time worked on a public holiday at the rate of double time and a half, with a minimum payment of four hours. The agreement on this employment condition does not recognise public holidays due to the agreement’s annual leave provision of six weeks annual leave. The provision states:
“11.2 Public Holidays:
Public holidays do not generally suit employees as recreational breaks on the scheduled dates due to the remote location of the workplace and the timing of work demands of the Company’s operations. As such the Employee and Employer agree to the treatment of Public Holidays as follows:
(a) For Periodic and Permanent employees, the benefits of public holidays are covered, amongst other things, by increased annual leave entitlements referred to in clause 11.3(a) (1).
(c) (sic) Public Holidays shall not be recognised as such, and will be treated as normal workdays for all employees covered by this Agreement.”
[21] The agreement’s annual leave provisions, as relevant to the public holiday issue, states:
“11.3 Annual Leave:
(c) Payments whilst on leave
…
(3) No adjustment is made for public holidays occurring during a period of annual leave, as public holidays are allowed for by the increased annual leave benefits.”
[22] Mr Houlihan submitted that in accordance with ss.89 (1) of the Act the National Employment Standards require that a period of annual leave is exclusive of public holidays. Therefore, as the argument goes, as the majority of public holidays are over the Christmas/New Year period an employee on leave between November and February for the six week annual leave period would also be entitled to the public holidays falling during that period.
[23] I acknowledge that the annual leave provisions of the agreement are more favourable to employees than the entitlements contained within the award. I also acknowledge Mr Houlihan’s argument in relation to the impact of the National Employment Standards on the agreement’s annual leave provisions. However, those arguments do not address the issue of payment for work performed on a public holiday as provided by the award of double time and a half.
[24] The argument was put that agreements in similar terms have been approved by members of the Tribunal. This argument, I presume, was put as support for the application before me. If this is the case, I do not accept the argument. I am not privy to the circumstances of those matters. Furthermore, I am not bound by single member decisions.
[25] An enterprise agreement passes the no-disadvantage test if that agreement would not result, on balance, in a reduction in the employees’ overall terms and conditions of employment under any reference instrument. The rates of pay in the agreement are but one factor in an employee’s overall terms and conditions of employment. When the terms and conditions of the agreement are considered as a whole and compared to the relevant reference instrument I am not satisfied that, on balance, the agreement passes the no-disadvantage test. I decline to approve the enterprise agreement subject to this application.
COMMISSIONER
Appearances:
Mr D Houlihan, agent, for the applicant.
Hearing details:
Sydney.
2010:
February, 3.
Final written submissions:
2010:
March, 2.
1 Item 2, Part 1, of Schedule 2.
2 PN41.
3 Clause 3.3.
4 Written submission at point 34.
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